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Policy review of water reform in the Murray– Darling Basin, Australia: the “do’s” and “do’nots”

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  • Grafton, Rupert Quentin

Abstract

The water reforms undertaken in the Murray–Darling Basin, Australia since 2007 have been viewed as a model for other countries seeking to respond to water insecurity. Here, a policy review is provided of this water reform and whether it delivers on key environmental objectives in the 2007 Water Act (the Act). The evaluation includes a review of the 2012 Basin Plan, a key instrument of the Act, and complementary policies associated with the acquisition of water entitlements for the environment via direct (reverse tenders) and indirect (infrastructure subsidies) means. Using the objects of the Act as a benchmark, an evaluation is provided of the following: (i) planned reductions in irrigation water extractions in the 2012 Basin Plan; (ii) risks associated with the 2018 amendments to the Basin Plan that, collectively, allow for an increase in irrigation water extractions of some 22 per cent, relative to the sustainable diversion limits specified in the 2012 Basin Plan; (iii) Basin-scale environmental outcomes achieved, as of the end of 2018; and (iv) economic effects of direct and indirect methods of acquiring water for the environment. Findings from the review generate the “Do’s” and “Do Nots” of water reform for Australia, and possibly other countries, when managing the trade-offs between water for irrigation and the environment.

Suggested Citation

  • Grafton, Rupert Quentin, 2019. "Policy review of water reform in the Murray– Darling Basin, Australia: the “do’s” and “do’nots”," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(1), January.
    • Handle: RePEc:ags:aareaj:333758
    DOI: 10.22004/ag.econ.333758
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    1. Wheeler, Sarah Ann & Zuo, Alec & Bjornlund, Henning, 2014. "Investigating the delayed on-farm consequences of selling water entitlements in the Murray-Darling Basin," Agricultural Water Management, Elsevier, vol. 145(C), pages 72-82.
    2. Lin Crase & Suzanne O’Keefe & Brian Dollery, 2012. "Presumptions of linearity and faith in the power of centralised decision-making: two challenges to the efficient management of environmental water in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(3), pages 426-437, July.
    3. R. Quentin Grafton & Mahala McLindin & Karen Hussey & Paul Wyrwoll & Dennis Wichelns & Claudia Ringler & Dustin Garrick & Jamie Pittock & Sarah Wheeler & Stuart Orr & Nathanial Matthews & Erik Ansink , 2016. "Responding to Global Challenges in Food, Energy, Environment and Water: Risks and Options Assessment for Decision-Making," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 3(2), pages 275-299, May.
    4. Lisa Yu-Ting Lee & Tihomir Ancev, 2009. "Two Decades of Murray-Darling Water Management: A River of Funding, a Trickle of Achievement," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 16(1), pages 5-24.
    5. Grafton, R. Quentin & Horne, James, 2014. "Water markets in the Murray-Darling Basin," Agricultural Water Management, Elsevier, vol. 145(C), pages 61-71.
    6. R. Quentin Grafton & Jamie Pittock & Richard Davis & John Williams & Guobin Fu & Michele Warburton & Bradley Udall & Ronnie McKenzie & Xiubo Yu & Nhu Che & Daniel Connell & Qiang Jiang & Tom Kompas & , 2013. "Global insights into water resources, climate change and governance," Nature Climate Change, Nature, vol. 3(4), pages 315-321, April.
    7. Perry, Chris & Steduto, Pasquale & Allen, Richard. G. & Burt, Charles M., 2009. "Increasing productivity in irrigated agriculture: Agronomic constraints and hydrological realities," Agricultural Water Management, Elsevier, vol. 96(11), pages 1517-1524, November.
    8. R. Quentin Grafton & Sarah Ann Wheeler, 2018. "Economics of Water Recovery in the Murray-Darling Basin, Australia," Annual Review of Resource Economics, Annual Reviews, vol. 10(1), pages 487-510, October.
    9. Lin Crase & Suzanne O’Keefe, 2009. "The paradox of national water savings: A critique of “Water for the Future”," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 16(1), pages 45-62.
    10. Grafton, R. Quentin & Chu, Long & Kompas, Tom, 2015. "Optimal water tariffs and supply augmentation for cost-of-service regulated water utilities," Utilities Policy, Elsevier, vol. 34(C), pages 54-62.
    11. Akter, Sonia & Grafton, R. Quentin & Merritt, Wendy S., 2014. "Integrated hydro-ecological and economic modeling of environmental flows: Macquarie Marshes, Australia," Agricultural Water Management, Elsevier, vol. 145(C), pages 98-109.
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    2. Sarah Ann Wheeler, 2022. "Debunking Murray‐Darling Basin water trade myths," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(4), pages 797-821, October.

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